Daily Stock Pick: Helmerich & Payne

This week, I'm looking for the fourth consumer energy representative of four for my Ivy portfolio.

That energy sector includes six industries all related to bringing oil and gas to market. They are: drilling, exploration and production (E&P), equipment and services, integrated, midstream, refining & marketing.  (Those six oily and gassy enterprises.)

Today I'm reviewing a mid-cap oil and gas drilling firm, named Helmerich & Payne, Inc. Its trading ticker symbol is HP. I last reported on HP on October 2, 2018.

Helmerich & Payne has the largest fleet of U.S. land drilling rigs. The company's FlexRig line is the leading choice to drill horizontal wells for production of U.S. tight oil and gas. H&P is present in nearly every major U.S. tight oil and gas basin and also has a small presence internationally.

Its real estate investments include a shopping center comprising approximately 441,000 leasable square feet; multi-tenant industrial warehouse properties covering approximately one million leasable square feet; and approximately 210 acres of undeveloped real estate located in Tulsa, Oklahoma.

Further, the company offers Bit Guidance System, an algorithm-driven system, which considers the total economic consequences of directional drilling decisions and consistently lowers drilling costs through more efficient drilling and increased hydrocarbon production.

Helmerich & Payne, Inc. was founded in 1920 and is headquartered in Tulsa, Oklahoma.

I use three key data points to gauge the value of any dividend equity-like Helmerich & Payne, Inc:

(1) Price

(2) Dividends

(3) Returns

Besides those three, several other keys will finally unlock an equity or fund in which to invest.

Those first three primary keys, however, best tell whether a company has made, is making, and will make money.

HP Price

HP's price per share closed at $55.56 Friday. A year ago its price was $64.59. The price fell $9.03 or nearly 14% in the past year.

Assuming HP's stock trades in the range of $44 to $70 this year, Helmerich's recent $55.56 price could rise by $3.44 and go to $60.00 by early-April, 2020.

HP Dividends

HP's most recent Quarterly dividend was $0.71 declared March 6th and payable, June 3rd.

That $0.71 Q dividend equates to an annual payout of $2.84 for a yield of 5.11% at Friday's $55.56 closing price.

Gains For HP?

Adding the $2.84 annual estimated dividend to my $3.44 estimate of Helmerich's price upside shows a $6.28 potential gross annual gain, per share, which will be reduced by costs to trade those shares.

Say we put a little over $1,000.00 today at the $55.56 recent stock price would buy us 18 Helmerich & Payne, Inc shares.

A $10 broker fee paid half at purchase and half at sale costs $0.56 per share.

Subtract that $0.56 brokerage cost from the estimated $6.28 gross annual gain leaves a net gain of $5.72 X 18 shares

= $102.96 or a 10.29% net gain on a $994.14 investment.

Therefore, Helmerich & Payne, Inc whose trading ticker symbol is HP, now shows a possible net gain of 10.29% including a 5.11% dividend yield.

Twenty-eight brokers cover this stock:

Ten say "buy" HP shares.

Four say HP will "outperform" peers.

Ten say "hold" HP.

One says HP will "underperform" peers.

Three say "sell" HP

Therefore, you can look at  Helmerich & Payne, Inc and see it has made money, is making money, and could throw a net gain of 10.29% including a 5.11% dividend yield. It could be more, it could be less.

The above speculation is based on past year performance. The actual results remain to be seen to determine if Helmerich & Payne, Inc is worth your time and money.

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